The diplomatic war is intensifying in South America

Politics, geopolitics and conflicts

Libya remains deadlocked this week with a UN-brokered deal between the rival sides on the appointment of a yet-to-be-determined Central Bank chief that both would support. We have little faith in a successful outcome for a compromise candidate. There can be no candidate for compromise because there is no desire for compromise. The issue of control over the country’s oil revenues remains unresolved and that makes who the CB controls here.

As Washington continues on a path of inaction over Maduro’s refusal to step down in Venezuela, the diplomatic war is intensifying in the region, with Venezuela and Argentina issuing arrest warrants for the other’s respective presidents. This additional challenge stems from Argentine President Milieu’s move to transfer Maduro’s private jet, which he had seized in 2022, to the United States.

On the Israel-Gaza front this week, as of late Thursday, Israel rejected the US-backed cease-fire agreement. The agreement proposed a 21-day ceasefire on the border with Lebanon.

Discovery and development

Equinor and DNO have confirmed their Heisenberg oil and gas discovery in the North Sea, estimating reserves between 24-56 million barrels of oil equivalent. The Deepsea Atlantic rig drilled a second well, which proved additional oil and confirmed the size of the discovery. While another target, the Angel prospect, yielded a smaller, less profitable discovery,…

Politics, geopolitics and conflicts

Libya remains deadlocked this week with a UN-brokered deal between the rival sides on the appointment of a yet-to-be-determined Central Bank chief that both would support. We have little faith in a successful outcome for a compromise candidate. There can be no candidate for compromise because there is no desire for compromise. The issue of control over the country’s oil revenues remains unresolved and that makes who the CB controls here.

As Washington continues on a path of inaction over Maduro’s refusal to step down in Venezuela, the diplomatic war is intensifying in the region, with Venezuela and Argentina issuing arrest warrants for the other’s respective presidents. This additional challenge stems from Argentine President Milieu’s move to transfer Maduro’s private jet, which he had seized in 2022, to the United States.

On the Israel-Gaza front this week, as of late Thursday, Israel rejected the US-backed cease-fire agreement. The agreement proposed a 21-day ceasefire on the border with Lebanon.

Discovery and development

Equinor and DNO have confirmed their Heisenberg oil and gas discovery in the North Sea, estimating reserves between 24-56 million barrels of oil equivalent. The Deepsea Atlantic rig drilled a second well, which proved additional oil and confirmed the size of the discovery. While another target, the Angel prospect, yielded a smaller, less profitable discovery, the Heisenberg discovery is being considered for a tie-in to existing infrastructure. This discovery could be coordinated with other nearby developments around key production centers such as Troll and Gjøa.

Oil India is set to resume exploration activities in Nagaland after discussions with the state and central governments along with ONGC. The company controls 30 blocks under OALP, but drilling has been delayed in Nagaland due to border disputes with Assam. While these challenges remain unresolved, a high-level committee has been formed to negotiate and facilitate exploration. Internationally, Oil India plans to start oil production in Gabon next year after a successful oil discovery in its Shakthi-II block jointly owned with Indian Oil Corp.

Wyoming’s latest oil and gas lease sale, held Wednesday, fetched just over $27,000, a sharp drop from historical norms as developers show little interest. Changes implemented by the Biden administration – including increased taxes, regulatory requirements and the leasing nomination process – are major factors in this decline – as are the logistical challenges of accessing markets due to its remote location. The sale of oil and gas leases offered just 159 acres, a record low under the Biden administration. Expect this to severely impact the state’s future oil and gas revenues.

TotalEnergies is ramping up preparations for a historic $9 billion oil development off the coast of Suriname, signaling a significant expansion of the Atlantic oil boom. While formal approval is awaited, the company is securing rig leases and reserving shipyard capacity for a floating production vessel. The project, in partnership with APA Corp., aims to exploit offshore oil discoveries dating back to 2020, with production expected by 2028. This investment marks a revival of deepwater exploration in regions such as Suriname, Brazil and Namibia, while oil majors are turning back to offshore drilling amid a maturing shale sector.

Deals, mergers and acquisitions

Azerbaijan and a consortium led by BP have signed an agreement to develop a new natural gas reserve in the ACG oil field, supporting Baku’s commitment to double gas exports to the EU by 2027. The reserve, estimated at 113 billion m3, is expected to start production. in 2025, with Socar buying all production. This agreement strengthens Azerbaijan’s position as a key energy supplier to Europe and helps expand the capacity of the southern Corridor gas pipeline. The project is crucial to achieving the annual export target of 20 billion cubic meters over the next three years.

Repsol acquired a 16.67% stake in Block 29 in Mexico from PTTEP, increasing its holding to 46.67%. This block, located off the southern Gulf of Mexico, is in the exploration phase and covers 3,254 km2. The consortium has made notable oil discoveries in the area and plans to continue its development efforts. Repsol is also focusing on improving its upstream operations in key markets such as Mexico, the US and Brazil.

The FTC will bar Hess CEO John Hess from joining Chevron’s board as a condition of approving Chevron’s $53 billion acquisition of Hess. That restriction is part of a broader antitrust crackdown on megamergers, similar to the FTC’s decision to block Pioneer CEO Scott Sheffield from joining Exxon’s board. The Chevron deal still faces a challenge from Exxon and CNOOC, which say it is a move to secure Hess’ valuable assets in Guyana. Hess owns a 30% stake in Guyana’s Stabroek block, with Exxon and CNOOC owning 45% and 25% respectively.